Improve Management of Retail Returns for a Better Customer Experience
Entrepreneur's New Year’s Guide
Customers pay far more attention to a retailer’s attitude toward product returns than many retailers realize -- making poor returns policies and cumbersome returns processes a significant obstacle to future sales. A staggering 88 percent of consumers say ease of returns is an important factor in choosing where to shop, according to research by JDA Software.
Retail Consultancy Kurt Salmon Associates has been tracking online returns for several years. In a recent report, the group gives online retailers a grade of “needs improvement” on their product return processes. The report found that while consumers think that a refund should be processed in about seven days -- with younger customers expecting even shorter time frames -- it actually took online retailers an average of 16.8 days to credit a product return during peak season.
One reason returns take so long for many retailers is that their product returns processes are too manual. They view returns as an unpleasant cost of doing business, not an opportunity to enhance customer service. Returns processing is regarded as a low-priority operation more focused on recovering lost value than in promoting future value.
That provides a clear opportunity for retailers who embrace product returns to differentiate themselves with customers, reducing churn and winning market share. Here are three steps to standing out through better management of returns.
1. Be liberal with product returns policies.
As discussed in previous blogs, customers with frequent product return rates often offset the costs of returns with profitable ongoing purchase behavior, justifying generous returns policies.
2. Create efficient processes for returns.
Implementing automated and efficient returns management software tells customers you care about their returns experience and want to earn their repeat business.
3. Track and analyze returns.
Don’t just process returns -- track who returned product, what they returned, and WHY. Invite customers to explain the reason for a return, and ask returns processors to inspect returned product and note their observations. They apply analytics to this data to improve product selection, handling, marketing and quality control.
Consumers care far more about product returns than retailers seem to think. Implementing effective returns processes pays off in a better brand experience, both in short-term customer satisfaction and in long-term improvements to understanding and servicing customers.